Free eFile – Freefile & Online Free Tax Prep Options

Freefile and free eFile sites let you prepare your income tax return for free but can they be quality tax prep options if they’re free?

Today we’ll take a look at how you can file your income tax return online for free and share our experience with the service.

Free eFile

For the past five years, I have used online e-file services to prepare and submit my tax returns for free. I have never had a problem with my tax returns since I started filing them online. If I was receiving a return, the turn around time was typically 10 to 14 days, and the time and energy it saved me in convenience has been worth it.

I encourage everyone that I talk to who qualifies for filing their taxes online for free to take advantage of it, because it can save you a lot of money and hassle this tax season. The IRS expects about 138 million taxpayers to file their taxes online this year.

The first day for filing your taxes online is almost here, January 16th, so start gathering your tax documents now so you can get tax filing over with. Here is some information about filing your federal taxes for free online this tax season.

IRS Free File Service

Qualifications:

Qualifications depend on which company you choose to file with

Most companies require that your adjusted gross income (AGI) be less than $54,000 for 2008.

Most companies that offer free e-file allow you to submit tax form 1040, 1040A, and 1040EZ as the main tax submitting document

How it works – The IRS themselves don’t offer the free eFile service, they have partnered with other companies to provide it for free. You start at the IRS website, select from a list of companies that offer the freefile option, and you’ll be taken to their website where you fill out your tax return.

Free e-File Online

This is similar to the IRS Free File, but it is a program offered by all of the major tax preparation software providers such as Turbo Tax, Tax Act, and Tax Cut by H&R Block. These tax software companies and others offer a free online e-file option for bare bones e-filing web software.

These companies also offer premium services ranging form $9.95 and up, and the advantages are better step-by-step instructions about tax credits and deductions.

How it Works – You don’t have to go through the IRS website to use this option, simply use one of the links below, select the “Online Free Edition” version, and file your tax return.

Why File Online for Free?

Most companies are offering as low as an 8 day turnaround time for tax returns as opposed to up to 30 days to receive a paper check in the mail.

Most people do not have complicated tax returns

Filing your taxes on your own and/or free filing is not for everyone. If you have a more complicated tax scenario, such as being a small business owner with significant income and assets, having complex investments, and/or you have a high net worth, it would probably be worth your while to pay a tax professional.

But, if your tax return is a simple, cookie-cutter filing and you meet the qualifications then free eFile can save you time and money.

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Erik Folgate is a husband and father living in Orlando who's been writing about money online for 6 years. Digging himself out of $20k of debt after college and his former experience in the insurance industry give him some useful insights into personal finance issues.